Temu Owner PDD Dives as EU Gets Set to Mirror Trump and Hike Taxes on Low Cost Packages
Shares in Chinese e-commerce group PDD Holdings (PDD) dropped today on fears that the European Union (EU) is planning a tax hike on imported goods.
Confident Investing Starts Here:
Direct to Doorstep
The EU is considering imposing a €2 flat fee on low-cost items entering the trading bloc. This is likely to hit small packages such as parcels coming from Chinese e-commerce groups such as PDD's Temu and fast-fashion company Shein.
If introduced it will mirror the scrapping of the de-minimis regime for low-cost items made by the U.S. during the tariffs stand-off between it and China.
According to the Financial Times, EU trade commissioner Maros Sefcovic wants the handling fee to be charged on direct sales from China to shoppers homes. It is estimated that 4.6 billion such packages end up on people's doorsteps with a huge nine out of ten coming from China.
A €0.50 fee is set to be imposed on items sent to warehouses.
Safety Concerns
Sefcovic is said, like President Trump, to be concerned about the safety of the goods coming in from China and the 'huge loads' and work it brings EU customs officials.
Trump's move was part of his strategy to boost domestic manufacturing of small items such as toys in the U.S. There is no indication that providing a similar boost to EU manufacturing is on Sefcovic's mind.
It will be another worry for Temu and Shein though with the latter already tipped to ditch its expected IPO in London because of economic uncertainty. Both had no doubt hoped that perhaps the worst of the shocks were over as U.S. and Chinese trade tensions eased in recent weeks.
But the EU has shown how vulnerable and volatile the new less globalized economy can be.
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